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UVXY

Volatility (VIX) - 1D - The range gets SMALLER, the risk GREATERIf you like this idea leave a like and follow me to get all of my updates :) I would love to talk to you so send me a message or comment! Underlying: VIX Time frame: 1D What Has Happened So Far: For anyone that is interested in seeing the FULL post click here. I have linked it because the post is far too long to put here. What am I Looking to Happen: As we know that the VIX historic average is 18.75 since 2004 we know that current levels are WELL below that, so we can look at opportunities to buy. To do this I looked at what the MACD has been doing. As you can see on the chart even the MACD has been narrowing which tells me there will be a break out. As this product (VIX) we are looking at EXPLODES to the upside, a lot of people could get hurt in this and the stock market. I feel that once price begins to break out of this range you will see a huge increase. Personally I am shorting the stock market rather than buying or selling VIX options as the VIX can do more damage there. I have linked my stock index ideas below. Target Profit: NA as this is to show how fear is being under-valued Stop Loss: NA as this is to show how fear is being under-valued If you like this idea leave a like and follow me to get all of my updates :) I would love to talk to you so send me a message or comment!
TVC:VIXLong
by SocialTrading
SP 500 SPX SPY "October Market Correction??"SO I have been hearing a lot about the long awaited (and very past due) market correction that analysts have been anticipating since August. SO lets assume they are correct and that there will be a large market correction in October. What can the charts help predict. Well first of all, a true ICL needs to break the low of the last DCL. Since it appears we have made a double 3, 4 wave count, I believe that we would have to correct at least below that red zone. And with a decent correction, I just don't believe that we will break the very long term black uptrend line which was established at the 2009 bottom. So I measured the small wave count for what I believe is a wave 5 and as you can see, a full 100% move up of wave 1 would take wave 5 to 2552 range. But that would only account for an approximate 8% correction to that black trend line. (being that we are so so late for the ICL correction, I am expecting a swift correction to last no more than a couple weeks). But if we are to have that 10% correction that they have been talking about then that would mean that the SP500 would have to climb just a bit higher to closer to 2600. I am actually kind of hoping for that correction because that would be a great and easy buy the dip opportunity before we get into the euphoric bubble phase of this market rally. GL By the way, a full 10% correction would mean that the sp500 would have to reach 2602. And based on the current trajectory of price movement, that wouldn't happen until the very end of October or early November. Otherwise, an 8% correction could start next week as that is the estimate for price to reach that 2550 zone. Let us also not forget about the very large bearish divergence that exists currently on the RSI. IT also exist on the weekly RSI.
TVC:SPXShort
by SalN
5
THE WEEK AHEAD: COST, BBRY, TEVA, MATEarnings COST announces earnings on Thursday after market close. With a background implied volatility of 21%, it doesn't meet my basic earnings play sniff test, but naturally that can increase running into earnings, so it may be worth keeping an eye on. Preliminarily, the Oct 20th 158/170 short strangle currently pays 2.21 at the mid with break evens around the 1 standard deviation line for both sides. The defined risk version of that play, a 155/158/170/173 iron condor, brings in 1.00, with break evens wide of the expected on both sides. (I looked at using the Oct 13th expiry to take maximum advantage of any vol contraction post-earnings, but strikes where I would want to set up my tent were less than ideal). Non-Earnings Post-earnings, BBRY implied volatility remains fairly high at 46.25%, placing it in the upper one quarter of the where it's been over the past 52 weeks. Given the size of the underlying, the only play that makes sense from a nondirectional standpoint is a Nov 17th 11 short straddle, which is paying 1.24 at the mid with break evens at 9.75 and 12.25. The generic drug maker TEVA's implied is at 51.31%, which is around the middle of its range over the past 52. It's not quite where I'd like to see it, and the Nov 17th 15/20 short strangle is only paying .80 at the mid with break evens short of the 1 standard deviation line In contrast, the Nov 17th 17.5 short straddle is paying 2.46 with break evens wide of the expected on both sides, but the comparable iron fly -- a Nov 17th 12.5/17.5/17.5/22.5 only pays 2.20, short of the one-quarter of the width of the longs I like to get out of those. For those looking to strategically acquire shares or to just sell directional premium, the 30 delta Nov 10th 16 short put is paying .52 at the mid with a break even of 15.48. Toy maker MAT has the right rank/implied metrics here, but with earnings a mere 17 days out, the preference is wait to put on a play shortly before earnings to take maximum advantage of vol contraction. Exchange-Traded Funds These are my bread and butter trades, but there's little bread and no butter here. The highest implied volatility exchange traded fund is EWZ at 31.43%, but it's in the lower one-fourth of where it's been over the past year. GDXJ follows with 29.93%; XOP, 25.96%; GDX, 23.25%; and OIH, 24.21%, all at the bottom end of their ranges and, in any event, below 35% implied generally. VIX et al. VIX finished Friday at sub-10 levels and its "little buddies" (VXX, UVXY, SVXY) continue to be cannibalized by contango. Sit on your hands for any VIX "Term Structure" trade (the first /VX future trading at >16 is in April) and wait for a VXST/VIX ratio pop to greater than 1.15 (Friday finish: 83.6) to put on plays in VXX, UVXY, and/or SVXY.
NASDAQ:COST
by NaughtyPines
THE WEEK AHEAD: WATCHING VIX AND ITS "LITTLE BUDDIES"With VIX settling at around 10 on Friday, there's little that catches my attention here in terms of pure premium selling. Currently, no individual underlying is up to my high implied volatility rank/high implied volatility standards and neither is any exchange-traded fund. Naturally, I'm beginning to sound like a broken record here. I mean, how many different ways can I describe this protracted low volatility market with descriptors such as the current market's being a "wasteland for premium selling," there being a "paucity of premium-selling plays," or that there is a lack of "sexiness" or "juice" in the market as far as selling premium is concerned. My options are either: (a) torture myself by putting on low probability of profit, low credit received at the door premium selling plays; (b) pursue low volatility strategies such as calendars and diagonals; or (c) wait with mounds of cash (I exaggerate with the "mounds" part) on the sidelines until volatility increases. To me, option (a) makes little sense here, since I'd be opting for low quality stuff just to have plays on or to "increase occurrences." It may just be me, but I like to have numerous quality occurrences on, not numerous crappy ones, and I guarantee you'll be in numerous low quality premium selling plays if you keep putting them on here and the market keeps doing what it's been doing (going up ... incessantly). This is particularly so if you continue to go nondirectional (i.e., short strangle/iron condor/iron fly) in this low volatility environment and in skewed instruments like SPY, IWM, QQQ, and the DIAs, where having call side risk on has just been a terribly "unfriendly" trade for several months now. That being said, things can change in an instant with an exogenous risk event, which we've been unexpectedly met with on several occasions during the past couple of months -- only to have the dip buyers promptly wade back in, lending credence to the fiction that we're in an endless bull market handicapped by an inability to undertake any meaningful correction such that the stories regarding this being a "bubbly" market valuation-wise entirely evaporate. I've done a few option (b) trades (SPY, IWM, GLD calendars), both small and with plenty of time to work out. But for them, I'd be almost entirely flat here. To a certain extent, I regard them as largely "engagement" trades with limited likelihood of huge gains, but also limited likelihood of huge pain, since they were put on for debits, my risk is defined, and I pretty much know how much is on the line should they not work out. In other words, they're just there to keep me from going entirely bat crazy bonkers while I wait for sufficient volatility to take advantage of the market with my go-to strategies -- short strangles, iron condors, and iron flies. The calendars beat a poke in the eye with a sharp stick, but not by much. Barring productive market behavior in SPY et al., I'm basically watching VIX here, along with its "little buddies" -- VXX, UVXY, and SVXY -- for an opportunity to add something there in the short-term or farther out in time. (See Posts below).
TVC:VIX
by NaughtyPines
6
OPTIONS TIP: WHEN/HOW TO MECHANICALLY SHORT VOLATILITYThere are two types of VIX or VIX product (i.e., VXX, UVXY, and SVXY) trades that I like: (a) "Term Structure" and (b) "Contango Drift" trades. "Term Structure" Trades "Term Structure" trades are only done in VIX, since only VIX has an underlying future (/VX) and a "term structure," with /VX futures prices generally priced at increasingly higher prices as you go further out in time. While these trades do benefit from contango, they are set up using the /VX futures term structure (not VIX spot price). In that sense, the price of VIX is somewhat irrelevant to these trades, although you'll naturally find that if spot is elevated, the futures price in the expiry in which you want to set up your trade is, too. My entries are straightforward: (a) find the /VX front month futures price >16 and in an expiry that is <90 days out; (b) sell a short call vertical spread with the short call aspect at/near the /VX futures price in the expiry that corresponds to that of the /VX future (i.e., if the /VX future >16 is in Dec, sell the VIX short call vert in the Dec expiry with the VIX short call strike at 16 and the long call out from that strike). You can naturally go lower (i.e., the 15 strike), but I view the 16 level as a fairly long term average level that I'm comfortable working with. As far as the width of the spread is concerned, that will be subjective. The wider you go, the more the max loss potential -- keep your risk consistent with your per trade risk tolerance. To give you some sense as to what to expect out of these: look for .70-.80/contract on a three-wide and look to take profit at 50% max. "Contango Drift" Trades The vast majority of the time, VIX is in contango. What does this mean? Without going into too much detail as to "why this is so" and at the risk of oversimplifying things, it basically means that products like VXX and UVXY decline over time in the absence of backwardation. Backwardation -- where near-term futures prices or spot is actually higher than longer-dated futures -- doesn't occur all that often, so the general, overall, long-term drift of these instruments is toward zero, with occasional reverse splits being necessary to prevent them from ceasing to exist. That being said, these instruments experience spikes just as VIX does; it's just that -- on average, over time -- they decline in value, and "Contango Drift" trades look to benefit from that fairly inevitable decline. Entries here are also straightforward, but some patience is required to wait for the right metrics to occur -- a VXST/VIX ratio of greater than 1.0. The higher the ratio, the better. When that ratio is greater than 1.0: sell a short call vert in either VXX or UVXY (a) in a 45 days until expiry or greater; (b) with the short call aspect at the first in-the-money strike; and (c) the long call aspect as wide as your per trade risk tolerance permits. With SVXY, an inverse, do the opposite: sell a short put vert (a) in a 45 days until expiry or greater; (b) with the short put aspect at the first in-the-money strike; and (c) the long put aspect as wide as your per trade tolerance permits. With these, I attempt to get 1/3rd the width of the spread in credit, so for a three wide, you should be seeking a 1.00 in credit; a four-wide, 1.25, etc. Liquidity in these instruments -- particularly in UVXY and SVXY -- can sometimes be "pesky" with wide bid/asks, so you frequently need to shoot for a mid price fill and then walk your fill price in incrementally to get filled. As with the "Term Structure" trades, I shoot for 50% of credit received for these. 1 -- Assuming that VIX is in contango. 2 -- SVXY, an inverse, increases over time. 3 -- SVXY, an inverse, "regular" splits. 4 -- I personally like something north of 1.15, but it's hard to hit these spot on.
TVC:VIXEducation
by NaughtyPines
8
THE WEEK AHEAD: RRC, GDX, GDXJ, AND XLIIn spite of various media reports that "volatility is back," anyone who plays the premium selling game knows that it isn't in significant measure. Nevertheless, there is some uptick in volatility as compared to the post-election to March volatility lull, which was a slog to get through for premium sellers who look to capitalize on a high implied volatility environment. That being said, the minor uptick isn't providing candidates for picky premium sellers like myself, who look for certain implied volatility metrics to get into plays. High Implied Volatility Rank/High Implied Volatility Underlyings Currently, there is only one underlying that meets my >70/50 rank/implied volatility metrics, and it's RRC with a rank of 98 and a background of 55. It's a land-based oil and gas exploration and development company with an abysmal balance sheet, and it's less than an ideal options play for the impatient, since it only has monthlies to work with. Possible plays would be an Oct 20th 15 short put at the ~26 delta (neutral to bullish), which is currently paying .50 at the mid with a break even of 14.50 or a nondirectional: the Oct 20th 16 short straddle (neutral to slightly bearish) is paying 2.30 at the mid with break evens at 13.70 and 18.30 (I would skew bearish, since we've seen a bit of a Harvey bump in oil prices that is likely to recede in fairly short order) or a defined risk Oct 20th 13/16/16/19 iron fly (neutral to slightly bearish) with break evens at 14.22/17.78, a credit of 1.78, and a buying power effect of 1.22. Low Implied Volatility Rank/Low Implied Volatility Currently, XLI, GDXJ, and GDX all have ranks at the very low end of their ranges. The gold plays are really no surprise there, with gold having ripped up to 52-week highs on risk off sentiment and overall Greenback weakness. Ordinarily, these would basically beg for a low volatility strategy such as a 40 delta/same strike* calendar, but these will not be worthwhile unless you go multiple contracts due to the size of the underlying. Consequently, working something like a 90/30 Poor Man's Covered Put** might be more productive if you've got an assumption that risk on and/or Greenback strength will return at some point and gold will weaken. For example, the bearish assumption Oct 20th 24 short put/March 16th 33 long put Poor Man's Covered Put costs a 7.66 debit/contract to put on. XLI -- which I honestly have not played much, evokes similar setups ... . VIX/VIX Derivatives The first /VX future at >16 (north of where I like to setup up my VIX tent, generally) is currently in January (128 days until expiry). That contact was trading at 16.12 as of Friday close, but it's still a little too far out in time for me to set up a play, since I generally like these with 90 days to go or less. The VIX Jan 17th 16/19 short call vertical with a fairly generous break even at 17.75, is paying .80 at the mid, which is generally what you get out of these VIX term structure plays (between .65 and .85/contract). That being said, the Feb expiry is amenable to laddering out, with the 17/20 paying .77, so I may go ahead and put on a trade if I see little else going on next week, particularly since it's a rollover week, where there might be some temporary uptick in futures contract pricing as the term structure adjusts. With the derivatives (VXX, UVXY, SVXY), I'm looking for a short VXX/short UVXY entry or an SVXY long entry if the VXST/VIX ratio pops to 1.15 or so. With VXX/UVXY, this will generally mean a 45 days 'til expiration short call vert with the short call slightly in-the-money and the long aspect out-of-the-money such that the spread yields one-third the width of the strikes. With SVXY (an inverse), it'll mean the opposite -- a short put vertical with similar characteristics. * -- Back month long at the 40 delta strike; front month at the same strike. ** -- Back month long at the 90 delta; front month at the 30.
CBOE_DLY:VIX9D
by NaughtyPines
Hurricane Harvey Tradeplay First and foremost, I must wish everybody caught in this horrific storm best of luck, and most importantly, safety. As to this daytrade, this is just something to watch and see how it performs. The severity of the storm warrants a spike in UVXY tomorrow morning. Me and my boys will be trading it tomorrow on our chatroom. We love UVXY. Mojodaytrading if you wanna come watch tomorrow. If it spikes, it's a good thing to journal because then you can feel confident using it in this type of situation in the future. I don't expect a gigantic spike, but good enough if you have the buying power. Plus, if you wanna play the reversal, which is a good play tomorrow, Mike has those down to a science
CBOE:UVXYLong
by alipipefitter
2
SP500 SPY "Looking for the correction to start last week of JulyMy timing is slightly off but with the recent breakout, it appears that my wave count is on the money. We are in wave 5 of a larger 1 of this bull markets final Wave 5. I hope that did not confuse you. So I do not think this will measure the same as wave 3 which would take it to around 2510 ish. And I am looking for it to be a little bigger than wave 1, which would take this to 2483ish. So maybe we touch 2500 before starting a steep larger wave 2 correction. I am looking at a little over a 9% market correction down to the long term trend line. It should end sometime in August. Then we should get a nice long wave 3 rally.
TVC:SPX
by SalN
6
SP500 "almost finished with a large wave 1"I have not posted a SP500 chart for a while so I thought I would show how its going. So far its following along with my prediction. As you can see, if we do reach 2500, then a 10% market correction would bring it down to the bottom of the large channel trend line. I may try TVIX in June. I am pretty sure we are about to finish a very large Wave 1 of our mega Wave 5. Mega because this wave analysis extends way back to before the 1929 crash. Which was the end of a Mega wave 2. Sorry if you do not like my use of the word Mega. We are, IMO, working on a mega wave 5. I am not expecting it to top until late 2019 at around the 3000 mark. And you know what comes after 5 mega waves up right. An equally proportional mega ABC correction. If I am correct, then this will be life altering for all of us for many many many years. I hate to think it but, there will probably be a big ass war if everyone is hurting that much.
TVC:SPXLong
by SalN
2
SP500, SPY - The End is nearSP500 Daily Chart Did you like my title? "The end is near". BUT NOT YET. I'll explain. First on this daily chart I would like to point out that we dropped a little bit over the last couple weeks. The hidden bearish divergence on the RSI below played out. But as you can also see, we have a larger hidden bullish divergence that has formed. Look at the last hidden bullish divergence and you can see how we made new highs shortly after. Well this divergence is a little bigger. So I do think we will be ramping up hear very soon and I do think we can reach somewhere around the 2500 range (to complete this larger 1st wave) before the larger corrective 2nd wave begins. Yes, only wave 2, not the END. That comes later. So lets look at some possible key events that could trigger the wave 2 correction. (and the correction should be a decent 10% drop). 1st, I do not think the FED will raise rates in May. Even if the market is up to 2500 at that point. The reason being is that I think the fear of the French election will keep the FED at bay. So there is a 2 round vote in France. The first one is April 23rd and the second is May 7th. I think the Brexit and Trump affect will win the day in France and Le Pen will be victorious. But the media wont say that. So that could have a similar affect as Brexit did. And thereby bring a little shock to the Markets. But that wont last long and we will start a hefty larger wave 3 of wave 5. I will post my Monthly or weekly chart next to show you what I see is happening. This market has structure and it is playing out like I see it.
TVC:SPXLong
by SalN
3
SP500 March 5th 2017Weekly Chart I just thought I would do an update to where I think we are in the broader markets. 1st I thought I would post this weekly chart so you can see my count as to when the "BIG CRASH" might (might take place). I am thinking not until the next presidential election. That's just a guess. Nothing special about it. But I think the Trump policies, once allowed to happen, will be great and very hyper bullish for the markets. That, combined with the flight capital leaving Europe which will inevitably make it to our markets as Europe implodes will propel the market super high. Who knows, I might be conservative on my chart. Time will tell. I think this spring we will get that correction that some people have been talking about. But before we do that larger pullback (which would be a wave 2 of the large wave 5) I think we will see the sp500 reach approximately 2500. I do think that we will get a rate hike in March but then, just like last time, we should shoot higher to that 2500 mark. This would encourage the Fed to raise again. The Fed likes to hike if the market shows it can handle it. For example, If we crashed down to 2000 with the March rate hike then I absolutely not believe they would raise again for a long long time because that would show weakness in the market. I will put up the daily next to show what I mean.
TVC:SPXLong
by SalN
SP500 Rate Hike Feb 1st ?? I do believe soI have been giving it some thought and I have a feeling that there will be a rate hike on February 1st and I will list my reasons. #1) We are currently in the micro wave 5 which wont last until the March 14th Fed meeting. 2) The CME group has a FED Watch tool that gives a percentage for the likelihood for a rate hike for this year.....and for Feb 1st we are at 96%. #3) the RSI is showing a good sized bearish divergence that you can see below. #4) we have not had a DCL low since November 4th and we are about due. #5) the market barely took a hit at the last rate hike and now the DOW just broke 20,000 which usually lets the FED know that the market can handle a rate hike. So then, if they do hike what could be expected for a drop in the SP500? If my wave count is correct and we are currently finishing wave 3...and this correction would be a wave 4, then we shouldn't be able to drop below the bold black line with the blue arrow which is 2194 max. But a more likely target for me would be the 100 DMA which should be approximately at 2210 - 2215 range by that time. Last little tid bit> what looks reasonable for a target price by February 1st. Well, you will know on that day or the day before but I am thinking that we push up to just over 2300, maybe up to 2310. Which we are almost there. GL
TVC:SPX
by SalN
Current Market StatusWe are not experiencing a traditional "January Effect", this market is showing a strong consolidation period; with clear trends migrating towards the downside. Will this trend reverse to the upside? The answer to this question can be clarified with an analysis of the VIX. Currently, VIX is trending to the upside, this would be an indication of the return of a "bear period" leading to a large correction. Deeper understanding of the numbers: Support: 19,963.80 Resist: 19,732.40 volume range Upper: 573,470,000.00 Lower: 158,260,000.00
DJ:DJI
by MontangeUpdate
THE WEEK AHEAD: SLIM PICKINGS FOR THE PREMIUM SELLERWith VIX at sub-12 levels, broad market implied volatility is low here, and a basic screen run for high implied volatility rank/high implied volatility yields few high quality results. Here's what I'm looking at ... . SPY et al (Broad Market) The first expiry with greater than 15% implied volatility for SPY is in the June expiry. The most I like to go out with these is around 90 DTE, so no play there unless you like to watch paint dry. (The theta decay of a June setup would be painful to watch). Earnings The only earnings play next week with >70 implied vol rank/>50 implied vol is $NFLX, which announces on 1/18 after market close. I'll probably play that with my standard volatility contraction setup, which will either be an iron condor or short strangle, although I could also see just playing it with a 20-delta short put (bullish assumption). Non-Earnings The only playable individual underlying without earnings on the horizon appears to be P, but the only worthwhile setup due to the price of the underlying would be an ATM short straddle, 45 DTE. It looks like that would pay 2.00 or so at the door; shooting for 25% max profit would yield about $50 per contract. Exchange Traded Funds There are literally no sector exchange traded funds out there that meet my criteria for a premium selling play (>70% implied vol rank; >35% implied volatility), unless you count $GDXJ (junior gold miners) and $UNG (the natty gas proxy). With $GDXJ, I'm contemplating the simplest play out there -- a naked short put (bullish assumption). Unfortunately, however, I missed the "meat of the dip," so am hesitant to pull the trigger here against a backdrop of Fed tightening and therefore Greenback strength going forward. I'll post the $NFLX, $P, and $GDXJ plays if I decide to play ... . VIX/VIX Derivatives I continue to keep an eye on VIX "front month" futures. The Feb expiry is currently trading at 14.20-ish; the March, at 15.70. The Feb is a bit low for my tastes on which to base a VIX term structure trade; I already have a March setup on; and VIX is too low for a "Contango Drift" trade in one of the derivatives. My original intention with UVXY was just to slap on an ATM short call vert post split, but the options chains have been somewhat slow to populate for the standard contracts. You will see the chain with both 20's (the nonstandard contract for options that were on when the split occurred) and 100s (the standard contract). Some care needs to be taken not to accidentally enter a trade in a non-standard or a combo of a standard and a non-standard ... .
TVC:VIX
by NaughtyPines
sp500 One more Bullish week? 2298SP500 Daily Chart It appears that we are in our micro wave 5 move to complete this bigger wave 3. That's how I see it anyways. And I think we can make it to almost 2300 before the DCL rollover. It just never seems to be able to make it all the way through those milestones marks the first time. If you zoom out you will see my little cycle indicators and if you zoom out further you can see the larger cycle indicators. But these seems to shift overs the years. But it appears to be about right for the present. I posted the RSI and you can see that even if we do make it to 2300 range, we are likely to have a bearish divergence. What is really scary is if you jump to the monthly charts, you can see a huge bearish divergence on the RSI from back in early 2015 to the present. When that will play out is a guess but I still think we climb to 3000 in late 2019 before the crash. And I think the November 2019 Presidential Election will be the Catalyst. That's is just my crazy long shot opinion. So looking for at least one more up week for the Markets. Dow will break 20,000 this time. Its ready, I can feel it.
TVC:SPXLong
by SalN